FUND.OF CORP.FIN.(LL)-W/ACCESS >CUSTOM<
11th Edition
ISBN: 9781260100259
Author: Ross
Publisher: MCG CUSTOM
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Textbook Question
Chapter 18.6, Problem 18.6BCQ
In Table 18.6, what would happen to Fun Toys’ deficit or surplus if the minimum cash balance was reduced to $5?
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1.How much is the average daily collections?
2. How much is the increase in the average cash balance due to the three-day reduction in the collection float if the new system is adopted?
3. How much is the gross benefit (annual return on the investment of increase in the average cash balance) of the lockbox system?
4. Should the company make the investment and adopt the lockbox system?
○Yes or No?
If it is a deficit why should add AFN amount to cash and cash equivalents, not to debt? can you clarify this, please
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Chapter 18 Solutions
FUND.OF CORP.FIN.(LL)-W/ACCESS >CUSTOM<
Ch. 18.1 - What is the difference between net working capital...Ch. 18.1 - Prob. 18.1BCQCh. 18.1 - List five potential sources of cash.Ch. 18.1 - Prob. 18.1DCQCh. 18.2 - Prob. 18.2ACQCh. 18.2 - Prob. 18.2BCQCh. 18.2 - Prob. 18.2CCQCh. 18.3 - What keeps the real world from being an ideal one...Ch. 18.3 - What considerations determine the optimal size of...Ch. 18.3 - Prob. 18.3CCQ
Ch. 18.4 - Prob. 18.4ACQCh. 18.4 - Prob. 18.4BCQCh. 18.5 - Prob. 18.5ACQCh. 18.5 - Describe two types of secured loans.Ch. 18.6 - Prob. 18.6ACQCh. 18.6 - In Table 18.6, what would happen to Fun Toys...Ch. 18 - Prob. 18.1CTFCh. 18 - A firm has an operating cycle of 64 days and a...Ch. 18 - Prob. 18.4CTFCh. 18 - Prob. 18.5CTFCh. 18 - Operating Cycle [LO1] What are some of the...Ch. 18 - Prob. 2CRCTCh. 18 - Prob. 3CRCTCh. 18 - Cost of Current Assets [LO2] Loftis Manufacturing,...Ch. 18 - Operating and Cash Cycles [LO1] Is it possible for...Ch. 18 - Use the following information to answer Questions...Ch. 18 - Use the following information to answer Questions...Ch. 18 - Prob. 8CRCTCh. 18 - Use the following information to answer Questions...Ch. 18 - Use the following information to answer Questions...Ch. 18 - Changes in the Cash Account [LO4] Indicate the...Ch. 18 - Prob. 2QPCh. 18 - Changes in the Operating Cycle [LO1] Indicate the...Ch. 18 - Prob. 4QPCh. 18 - Calculating Cash Collections [LO3] The Morning...Ch. 18 - Prob. 6QPCh. 18 - Prob. 7QPCh. 18 - Calculating Payments [LO3] Sedman, Corp., has...Ch. 18 - Calculating Payments [LO3] The Torrey Pine...Ch. 18 - Calculating Cash Collections [LO3] The following...Ch. 18 - Calculating the Cash Budget [LO3] Here are some...Ch. 18 - Prob. 12QPCh. 18 - Prob. 13QPCh. 18 - Prob. 14QPCh. 18 - Calculating the Cash Budget [LO3] Wildcat, Inc.,...Ch. 18 - Prob. 16QPCh. 18 - Costs of Borrowing [LO3] In exchange for a 400...Ch. 18 - Prob. 18QPCh. 18 - Prob. 1MCh. 18 - Prob. 2MCh. 18 - Prob. 3M
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- Which of the following methods can NOT be used to improve the firm’s cash conversion cycle? Decrease the firm’s inventory conversion cycle. Decrease the firm’s receivables collection period. Decrease the firm’s payables deferral period. Increase the firm’s payables deferral period.arrow_forwardHello about the calculation, shouldn't be surplus because the BOP result is positive? and negative when the BOP is negative? Explain why 20,000 is deficitarrow_forwardIf the total asset is smaller than total liabilities and equity on the balance sheet, what does that mean ( deficit or surplus)? And if it's a deficit why should I add the AFN amount to cash and cash equivalents not to debt! can you clarify this pleasearrow_forward
- 1. How much is the average daily collections? Format: 111,111 2. How much is the increase in the average cash balance due to the three-day reduction in the collection float if the new system is adopted? Format: 1,111,111 3. How much is the gross benefit (annual return on the investment of increase in the average cash balance) of the lockbox system? Format: 11,111 4. Should the company make the investment and adopt the lockbox system? Yes or Noarrow_forwardWhich of the following statements is NOT CORRECT? a. The cash budget is useful for estimating potential funding needs, especially for short-term working capital loans. b. Working capital management is critical because it affects financing decisions and the firm's profitability. c. Credit policy affects working capital because it impacts both sales and the time it takes for receivables to be obtained. d. If a company needs to increase its cash flow from operations in the next month or two, it can change its credit policy from 2/10 net 30 to net 60. e. f a company is unsure about the volume of sales, profits, and cash flows for the coming year, it will retain a relatively large amount of cash and marketable securities.arrow_forwardBecause of concern for the uncertainties of the CD reorder business, how would I provide analyses supporting whether or not your recommendations would change? Notes: if testaments of projected cash revenue were reduced by 10%. If the "buffer margin" or tripled from 2.5% to 7.5%arrow_forward
- Calculate the NPV of the following cash flows using a 10% discount rate? The first cashflow is negative, Year 0= -900, all others are positive Year 1= +100, Year 2= +100, Year 3= +400, Year 4= +500, Year 5= +500 a. $36 b. $ 520 c. $ 996 d. $ 326 e. $ 226arrow_forwardSuppose the economy is in a recession and the government is running a budget surplus. This implies the government is running a __________ and decreasing its __________. structural surplus; net debt structural deficit; net debt structural deficit; net asset structural surplus; net asset balanced budget; net assetarrow_forwardI woud like to know what is the formula for accumulated deficit and cash and cash equivalents (the plug).arrow_forward
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